Introduction

Further to our prior Tax Newsletters issued in relation to the Procedure for Settlement of Overdue Taxes Law (L.4(I)/2017) ("Law"), we would like to inform you that on 29 April 2021 law 79(I)/2021 ("Amending Law") was published in the Official Gazette of the Republic, which in effect provides for the settlement of overdue taxes relating to the tax years 2016 – 2019 (both years inclusive) under certain conditions.

Specifically, the Law has been amended to capture periods up until the 31 December 2019, provided that the taxpayer falls under any of the following categories:

  • Companies and self-employed persons subject to Value Added Tax ("VAT"), which present a decrease in their turnover for the year 2020 compared to 2019, by at least twenty five percent (25%), due to the restrictive measures taken to address the effects of the COVID-19 pandemic and;
  • Companies and self-employed persons who are exempt from the obligation to register for VAT purposes (Approved Private Tutoring, Conservatories / Music Schools and Schools of Dance), which present a decrease in their turnover for the year 2020 compared to 2019, by at least twenty-five percent (25%), due to the restrictive measures taken to address the effects of the COVID-19 pandemic.

Furthermore, should a taxpayer decide to enter into an arrangement for the settlement of its overdue taxes relating to periods up until 31 December 2019, they will need to do so within 12 months from the date of enactment of the Amending Law (i.e. by 29 April 2022).

It should be relevant to note that unlike the provisions applicable for the settlement of overdue taxes for periods up until 2015, where the taxpayers have the right to apply for regulation within six months from the date that any future assessment is issued, the Amending Law specifically provides that no such regulation is possible for any future assessments to be issued that relate to the period 1 January 2016 until 31 December 2019.

Moreover, should a taxpayer decide to enter into an arrangement under the provisions of the Amending Law, they will need to file relevant tax returns by 31 December 2021.

Finally, even though an arrangement created by a taxpayer should automatically be cancelled in case 5 instalments are not paid, the Amending Law provides that any due instalments relating to the period from 1 March 2020 to 31 December 2020 should be ignored for this purpose.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.